The Defence Honours and Awards Appeals Tribunal yesterday handed down its decision following years of lobbying for the former Tasmanian sailor to be honoured.

Ordinary Seaman Edward ``Teddy'' Sheean died in November 1942 aged 18 when HMAS Armidale sank off the island of Timor when under attack by Japanese planes during World War II.

Despite being ordered to abandon ship, Ordinary Seaman Sheean strapped himself to a gun on ship and kept firing until he was killed, bringing down at least one plane and being hailed as a hero.

He was mentioned in dispatches for his deeds.

The tribunal recommended that no posthumous Victoria Cross be awarded but the Navy perpetuates the use of Sheean as the name of a major combat vessel. 

One of Australia's six Collins class submarines is called the HMAS Sheean.

The inquiry concluded there was no manifest injustice or no new evidence to support reconsideration for a Victoria Cross but also commented on Ordinary Seaman Sheean's bravery.

``The tribunal concluded that Sheean's actions displayed conspicuous gallantry but did not reach the particularly high standard required for recommendation for a VC,'' the report said.

The report said had he lived, he may have qualified for a higher award than being mentioned in dispatches.

Yesterday in Launceston, family and supporters of Ordinary Seaman Sheean said they were disappointed with the decision.

Ordinary Seaman Sheean's nephew, Garry Ivory, of Punchbowl, said he was proud of his uncle and the family had been confident the award was going to be upgraded.

Former Tasmanian Liberal senator Guy Barnett and the Liberal candidate for Bass Andrew Nikolic, who gave evidence to the tribunal, said Ordinary Seaman Sheean deserved a Victoria Cross and would investigate if an appeal was possible.

Mr Nikolic, who retired from the army in 2010 as a brigadier, said he had written bravery citations during his career.

He said citations needed to be ``championed'' up the chain of command and this probably did not happen in 1942.